About Rs 1, 25,000 cr is outstanding in MSME sector by banks: SIDBI
Updated: Jul 01, 2013 04:22:25pm
New Delhi, Jul 1 (KNN) An amount of about Rs 1,25,000 crore is outstanding in the micro, small and medium enterprise (MSME) sector by banks, according to SIDBI chief, Sushil Muhnot.
Speaking at an ASSOCHAM event held here last week, "A large number of proposals are being processed in the MSME space by the banking sector as about Rs 1,25,000 crore is outstanding in the MSME sector by banks," the Chairman and Managing Director (CMD) of the Small Industries Development Bank of India (SIDBI), said while addressing a national conference on 'Credit Ratings: Assessment and Impact.'
Further, Muhnot said that the sector is likely to grow higher than 11.5 per cent during the course of the next few years owing to certain recent initiatives undertaken by the government like public procurement policy, defence offset policy and others.
The conference was organized by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The CMD Of SIDBI also indicated that there was a need to make MSMEs ratings ready, to make them understand value and benefits of ratings so that more and more MSMEs go for the exercise.
“There is a perception in the MSME sector that rating agencies have a model that is more suited to the large companies, thus we need to have a model to increase awareness of ratings in the MSME sector and SIDBI would be glad to associate and be a part of this as we feel it would benefit the sector as it would ensure better access to credit by way of ratings,” said Muhnot.
Currently only a few MSMEs go for ratings as they get a subsidy from NSIC. Besides, most banks have promised to bring down interest rate by 75 basis points to one per cent if they get investment grade ratings.
“But we need to create more awareness in this regard so that MSME sector on the whole is able to take the advantage of ratings,” said Muhnot.
He is of the opinion that it could be tried through cluster approach as certain credit rating agencies are already doing. However, more robust steps would be required in this direction as the sector is rather large.
The SIDBI chief further said that the next level of growth for credit rating industry could be achieved if they focused on the MSME sector which has about 30 million units across India; contributing to about 40 per cent of India’s exports and 45 per cent of India’s industrial production and employed about 70 million people.
An ASSOCHAM-CRISIL backgrounder titled 'A Primer on Credit Ratings,' was also released on the occasion. (KNN)
Speaking at an ASSOCHAM event held here last week, "A large number of proposals are being processed in the MSME space by the banking sector as about Rs 1,25,000 crore is outstanding in the MSME sector by banks," the Chairman and Managing Director (CMD) of the Small Industries Development Bank of India (SIDBI), said while addressing a national conference on 'Credit Ratings: Assessment and Impact.'
Further, Muhnot said that the sector is likely to grow higher than 11.5 per cent during the course of the next few years owing to certain recent initiatives undertaken by the government like public procurement policy, defence offset policy and others.
The conference was organized by the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The CMD Of SIDBI also indicated that there was a need to make MSMEs ratings ready, to make them understand value and benefits of ratings so that more and more MSMEs go for the exercise.
“There is a perception in the MSME sector that rating agencies have a model that is more suited to the large companies, thus we need to have a model to increase awareness of ratings in the MSME sector and SIDBI would be glad to associate and be a part of this as we feel it would benefit the sector as it would ensure better access to credit by way of ratings,” said Muhnot.
Currently only a few MSMEs go for ratings as they get a subsidy from NSIC. Besides, most banks have promised to bring down interest rate by 75 basis points to one per cent if they get investment grade ratings.
“But we need to create more awareness in this regard so that MSME sector on the whole is able to take the advantage of ratings,” said Muhnot.
He is of the opinion that it could be tried through cluster approach as certain credit rating agencies are already doing. However, more robust steps would be required in this direction as the sector is rather large.
The SIDBI chief further said that the next level of growth for credit rating industry could be achieved if they focused on the MSME sector which has about 30 million units across India; contributing to about 40 per cent of India’s exports and 45 per cent of India’s industrial production and employed about 70 million people.
An ASSOCHAM-CRISIL backgrounder titled 'A Primer on Credit Ratings,' was also released on the occasion. (KNN)
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